SMS Costs Could Fall in India

Published on: 23rd Nov 2009

Note -- this news article is more than a year old.

The cost of sending an SMS in India may be set for a substantial reduction if the telecoms regulator, TRAI decides it needs to regulate the tariffs. The regulator has long been wary of regulating tariffs, but recent media fuss over the cost of sending an SMS has pushed it into a review of the policy.

"We are going to issue a consultation paper to review telecom tariffs
within 20 days to a month.", a TRAI official told The Economic Times
newspaper. If regulated, then it is expected that subscribers can see the new
tariff rates coming into effect by the end of Q1 2010.

According to the official, the move would have come sooner had the regulator
not had its hands full with a consultation process on controversial 3G spectrum
issues.

It is widely expected that plunging costs for sending SMS would lead to a
huge spike in usage, much as happened in The Philippines, which has one of the
highest usages of SMS in the mobile world. Such a move would also be a boon for
SMSC vendors as the networks rush to upgrade their messaging capacity.

The newspaper claimed that the true cost of sending an SMS would never have
come to light if new entrants into the Indian market had not been forced to sign
interconnection agreements with existing operators at a price that is far higher
than the actual cost.